Oil prices ended higher Monday but were off their four-week highs as Hurricane Ida weakened into a tropical storm after making landfall in Louisiana on Sunday and oil and gas companies started rescheduling the re-opening of production and distribution facilities shut ahead of her approach.
Nearly all US offshore Gulf oil production, or 1.74 million barrels a day of output, was suspended in advance of the storm, along with processing operations in refineries in and around Louisiana and the movement of oil and gas in some pipelines.
The rise of oil prices ahead of last weekend slowed yesterday when it became clear the damage to the production facilities was minimal.
Brent crude futures settled up 71 cents at $US73.42 a barrel after touching four-week highs. They jumped more than 11% last week in anticipation of disruptions to oil production from Hurricane Ida.
US West Texas Intermediate crude futures edged up 47 cents to $US69.21 a barrel, having jumped a little more than 10% over the last week.
Now oil traders turn their attention to the September 1 meeting of OPEC+ which is expected to approve a 400,000 barrel a day easing in the group’s production cap for the next month.
Reuters reports the group is likely to keep its oil output policy unchanged and continue with its planned modest production increase.
But the OPEC+ sources said the recent rise in oil prices was temporary, driven mainly by disruption of supply in Mexico and the severe storm hitting the US Gulf Coast over the weekend.
“Current oil prices around $70 are okay. OPEC+ is likely to continue as planned with the increase of 400,000 bpd,” one source told Reuters.
Another OPEC+ said it was “very likely” that the 400,000 bpd increase would go ahead from September.
